The Matrix of Economic Transformation: 7 Acupuncture Points that address the challenges of our current Economic Thought

These are 7 acupuncture points for Economic Transformation:

The three classical production factors:

1. Nature
2. Labour
3. Capital

The modern production functions:

4. Technology                                                                                                            5. Management

The user side of the equation:

6. Consumption                                                                                                        7. Governance

In all the seven areas there are problem symptoms that call for reframing the deeper core issue. And for each one there are practical leverage points for transforming the curent ego-centric system into one that is eco-centric.

NATURE: From Resource to Eco-System

The central challenge of our existing economic system is that it is based on the objective of infinite growth in a world of finite resources. Instead of treating nature’s gifts as commodities that we buy,use and throw away, we must treat the natural world as a circular ecology that we need to cultivate and co-evolve with.

Leverage points for shifting the system in this directions include:

• • A circular economy with cradle – to – cradle design principles.
  • Eco-system restoration with circular agriculture that cultivates the soil.

Labour: From Doing a Job to doing Your Own Thing

By 2050, it is estimated that roughly 40% of the current jobs will be replaced by automation.

Instead of thinking of labour as a ‘job’ that we perform to earn money, we must reinvent work and treat it as a creative act that allows us to realize our highest potential.

Leverage points for shifting the future of work to a more interpersonal and cultural- creative realm include:

• • Universal basic income for all
  • Free access to Education 4.0 that activates one’s highest future potential

Money: From Extractive to Intentional

We are all aware of the unprecedented accumulation of money on a global level.

The challenge here is to redirect the flow of financial capital into the real economy and renew the societal commons.

Today we have too much money in one place – speculative, extractive money – and too little money in another – intentional money that contributes to the regeneration of our ecological, social and cultural commons.

Leverage points for redesigning the flow of money include:

• • Circular currencies, for replacing extractive money
  • Tax System Reforms, for taxing resources instead of labour

Technology: From Creativity-Reducing to Creativity-Enhancing

How can technology empower people to be makers and creators of their worlds and systems rather than being manipulated by tech companies like Facebook and Google?

Both Facebook and Google started as idealistic student enterprises with the idea of making the world a better place. And in many ways they did. But as they grew, they also abandoned their original stance against advertising in order to satisfy their investors’ desires to maximize their gain.

Other serious complaints against tech companies are also pouring in.

Leverage points for new co-creative  social technologies include:

• • Tools that allow individuals and communities to visualize the social-ecological footprint of their consumption choices at the point of purchase.
  • Technology enabled tools that let individuals and communities see themselves through the mirror of the whole.

 Management and Leadership:

We collectively create results that nobody wants (i.e. destruction of nature, society and our humanity).

The challenge here is to counteract massive leadership failure across institutions and sectors.

Instead of pandering to super-egos, we need to strengthen leaders’ capacity to co-sense and co-shape the future on the level of the whole eco-system.

Leverage points for moving in this direction include:

• • Infrastructures for co-sensing seeing the system from the edges(walking in the shoes of the most marginalized members) and from the whole. e.g. Dialogue and SPT
  • Large Scale Capacity Building Mechanisms that support ego-to-eco shifts. e.g. U Lab

CONSUMPTION:

The challenge here is to develop well being for all. Today more output, more consumption, and more GDP does not translate into more well being and happiness.

Rather than promoting consumerism and metrics like gross domestic product, we must implement sharing-economy practices and measurements of well-being such as gross national happiness (GNH) or the genuine progress indicator (GPI). Leverage points in this domain include:

• • Well-being-economy practices and new economic indicators
  • Participatory budgeting

GOVERNANCE:

The challenge here is to close the disconnect between decision making in complex systems and the lived experiences of people affected by those decisions.

Reinventing governance means complementing the three classic coordination mechanisms that we are familiar with (the visible hand of hierarchy, the invisible hand of the markets, and the multi-centric coordination among organized interest groups) with a fourth mechanism: acting form shared awareness of the whole.

Leverage points in this domain include:

• • Infrastructures that make it possible for the system to sense and see itself in order to catalyze awareness-based collective action (ABC)
  • Commons-based ownership rights that protect the rights of future generations ( in addition to private and public property rights)

Each leverage point addresses what Polanyi articulated as the commodity fiction of nature, labour and money but from a different angle.

To summarize:

By looking at the economy through the Theory U lens, we can identify ways to upgrade the operating system along all seven acupuncture points.

This write up is based on Theory U by MIT Prof. Dr. Otto Scharmer